Uniswap Foundation’s Upgrade Proposal Still Remains Uncertain: Report

The Uniswap Foundation’s proposal to upgrade the Uniswap Protocol Governance has stirred the community concerning the foundation’s focus on converting the UNI token into a utility token. Chinese crypto reporter Colin Wu’s Wu Blockchain page recently published a blog post clarifying the key aspects of the proposal.

On February 23, Uniswap Foundation’s governance lead, Erin Koen, took to X to introduce the proposal that intends to incentivize active, engaged, and thoughtful delegation. According to him, the proposal, if approved, would help increase the resilience and decentralization of the foundation.

In his blog post, Colin Wu differentiated between Uniswap Labs and Uniswap Foundation. Uniswap Labs is a commercial company, and Uniswap Foundation, on the other hand, is a non-profit organization that concentrates on Uniswap protocol’s governance and community development. He stated that while Uniswap Foundation submitted the proposal, Uniswap Labs hasn’t yet accepted or commented on it.

In addition, Wu helped analyze the estimated fee distribution among UNI holders. While Uniswap’s annualized Liquidity Provider (LP) fee is approximately $626 million, the token holders could earn $62.62 million to $156.5 million in annual dividends.

Devin Walsh, the Executive Director of Uniswap Foundation, asserted that the proposal “not only invigorate Uniswap governance in the short term, but also ensure the long term success and resilience of the Protocol.” She added that incentivizing active delegation is “integral to long-term protocol sustainability.”

However, the acceptance and passage of the proposal remain uncertain. Still, Wu believes that the proposal ultimately intends a transition to utility tokens. He stated that other institutions or community leaders will continue to strive to convert UNI into a utility token if the proposal fails.

Following the proposal, the UNI token saw a substantial increase of over 40%, surging from $7.24 to $10.22. Despite a 24-hour decline of 4.36%, UNI, currently trading at $10.60, shows a weekly gain of 41.3%. At the time of the surge, a wallet holding 5.44 million UNI tokens sold 90,000 tokens for $1.03 million.